Dividing Business Assets on Divorce

Year Published: 2020

Dealing with business assets on divorce can lead to some complex legal issues.

Quite often, a business is the most valuable asset owned by a couple and it is therefore important that this is dealt with correctly to ensure a fair outcome for both parties.

There is a two-step approach to dealing with business assets on divorce:

  1. Valuing the asset
  2. Deciding how the value of any business assets should be reflected in the overall financial settlement

Usually, there is no need for a formal valuation of a business, for example if the business interest is a small minority shareholding or simply an income stream for the family with no real value.

Having said this, there are occasions when it may be beneficial to formally value a business by instructing an independent expert. Care needs to be taken when taking this valuation into account as part of the overall settlement however, as the value of a business is not the same as the value of cash and the two cannot be treated like for like.

There is also the issue of whether a business should be treated as matrimonial property at all, for example if the business was established and built up before marriage or if the business was inherited by one party to the marriage.

Dealing with a separation when there are business assets involved can be complex and requires specialist advice.

If you are going through a similar situation and would like further guidance, please contact Cheryl Haywood, Family Associate, on 01260 282314 or email [email protected].

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